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OP says they refused to allow him to pay at police station. I'm sure if he had insisted they would have had to allow him to pay it at the police station, but this sort of 'persuasion' when in a position of authority is tantamount to extortion. If they didn't then they would either have to let him go or arrest him, and if it were the latter the fine would likely be very low or non-existent (assuming he could produce his passport and was not on overstay).

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It's also the law for Thais to carry their ID cards. Do you think the police would ask them for 5000 baht if they didn't have it with them? Of course not. So they're profiling you based on your race or nationality and using their power to threaten to ruin your day if you don't give them money. It's basically them saying,

"pay 5000 baht or we might arrest you but probably won't but even if we do you will be out before the end of the day and you won't have had to pay anything like 5000 baht, so how much is your time worth?"

That to me is extortion.

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The actual wording of the law states that youneedto be able to produce yourpassportwhen asked todoso by an authority entitled to demand to see it. In practice, it's normally acceptable tocarrya photocopy of thepassportdetails page AND the page showing the current stamp giving you entry toThailand.

Quote

Thailand police: Foreigners not required to carry passports at all times

Pol Lt Gen Prawut Thawornsiri was responding to an article published by The Sydney Morning Herald on Dec 12, which said a growing number of foreign tourists are being stopped, searched and harassed by Thai officials on busy Sukhumvit road.

The issue was also raised with Thailand tourism authorities by British Ambassador Mark Kent: